Category: Accounting Newsletter

What the heck is a withholding tax?

The only thing that is as certain as paying taxes is how complex they are. There’s no way around it: taxes are confusing. That’s the way they’ve been for centuries (when collectors took wheat or rice instead of coins or paper money)! So, you might be wondering, what the heck is a withholding tax?  How can they impact my interactions with the IRS? Well, sit back and read up because we have some simplified answers ready and waiting for you! 

First Off, What is It? 

You might have noticed this term when you’ve reviewed your paycheck. It’s a normal component of how income taxes are calculated: the sliced-off portion of the money that your employer doesn’t actually give you – they send it to the Internal Revenue Service, so you are not obligated to do so. The major reason why they are so important is that you need to be sure that the withholding is correct and isn’t unfair to you. A surplus of money benefits you because you’ll get a bigger tax refund. On the other hand, a shortage means you’ll owe the IRS money instead.

Who is Responsible for Paying Them? 

As you might have guessed, your boss is supposed to pay the withholding tax for you. The process becomes a bit fuzzier if you work as a freelancer or independent contractor, for instance. It’s possible to be exempt from it, too. The catch is that you can’t owe any federal income tax for the previous tax year and that you don’t owe anything for this coming tax year, either. 

The Basics of This Taxation Concept 

It’s easy to break down the withholding tax into smaller parts. The first piece of the puzzle is the W-4 form you submit to your employer once you are on the job. This document includes information about your income, your filing status, and if you have elected to allow your employer to withhold additional money.  Federal, state, local, and FICA taxes “payroll taxes” are the other fundamental elements you should recognize. That’s because they pay towards Social Security and Medicare funding. 

Crunching the Relevant Numbers 

The IRS provides a Tax Withholding Estimator. This tool enables you to review your withholding status. Before you can get started, you’ll need pay stubs, additional income information, and the most recent income tax returns. If you’re married, it’s a good idea to gather the relevant documentation from your spouse. 

Trust the Professionals at the Harding Group

Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients. 

Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning?  We have the necessary expertise and years of proven results to help. 

We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on FacebookTwitterYouTube, and LinkedIn

 

The post What in the World is the Withholding Tax? appeared first on The Harding Group.

Did you miss our previous article…
https://www.digital-accountants.com/?p=165

[Updated original post from Sept. 28 with additional information on PwC Australia’s internal investigation. Update is at the bottom of this article.]

Australian Financial Review has a blockbuster of an exclusive this morning, one that involves “a human resources executive dressed as a bat from Wuhan” and a senior manager of diversity and inclusion mocking Chinese accents at a PwC Australia trivia event last week.

From AFR:

The virtual trivia was run by members of PwC’s human resources team as a work event for the national infrastructure division.

These senior staff members’ responsibilities include improving diversity at the firm and being part of the complaints process for staff who feel they have faced racial discrimination or harassment.

Let’s rewind. The event was run by members of PwC’s human resources team whose responsibilities include improving diversity at the firm and being part of the complaints process for staff who feel they have faced racial discrimination or harassment. I can totally see why a leader of this event would think it’s a good idea to dust off the ol’ bat costume because LOL Wuflu, amirite?! Oof.

In a statement to AFR, PwC Australia CEO Tom Seymour said that this behavior “did not reflect the values and culture of our firm” and that he is “extremely disappointed that this incident has occurred.” You’ll note he added that offending some staff was “unintentional,” which makes us wonder if senior staff doing this intentionally might actually be marginally better since it can be written off as assholes meeting expectations rather than morons doing racist things at firm events and being surprised when people get offended.

Thanks to the brave souls who brought this incident to the attention of the media, PwC Australia has opened an internal investigation which will no doubt lead to much hand-slapping and tsk-tsking directed at the offending (no pun) individuals.

The firm’s leadership team met on Saturday morning after becoming aware of the event on Friday, with Mr Seymour emailing all partners about the incident on Monday.

He also held a town hall meeting on Monday afternoon in which he apologised to everyone who had attended the trivia event, and further firm-wide communications were sent on Tuesday.

Staff members at the town hall meeting were initially frustrated by suggestions from the leadership team that an internal investigation may take weeks to resolve, with one telling the Financial Review that the matter should be better prioritised.

Prioritized it has been, with the firm telling AFR it will be fast-tracking the investigation and expects to make its findings sometime next week.

This whole thing brings to mind how KPMG UK chair Bill Michael had to quit after comments he made to staff in a virtual town hall earlier this year were made public, which eventually led a firm vice-chair to say KPMG is actively discouraging staff from going to the media when the firm does something stupid. Perhaps PwC Australia will be the next firm to need a good roll of Flex Tape to stop the leaky sieve.

PwC investigates HR executives after ‘racist’ trivia event [Australian Financial Review]
PwC probes ‘racist and offensive’ internal staff event [Accountants Daily]

UPDATEAustralian Financial Review reports that the employees involved have been fired and “the partners associated with the incident have been financially penalised as part of CEO Tom Seymour’s response to the scandal.” Read more here.

The post [UPDATED] PwC Australia Diversity and Inclusion Manager Who Mocked Chinese Accents Had to Be Told You Aren’t Supposed to Mock Chinese Accents appeared first on Going Concern.

Did you miss our previous article…
https://www.digital-accountants.com/?p=142

Even if you own a relatively small business, you can afford to utilize cloud accounting.

The accounting industry is always changing. Advances in technology change the landscape, which is true for many facets of modern life. Even if you own a relatively small business, you can afford to utilize cloud accounting. This approach will, hopefully, optimize your business operations. Finding ways to cut operating costs that do not come at the expense of employees, customers, and clients is always the right move. Let’s talk about some of the compelling reasons to make the switch.

It Increases Overall Data Security 

First and foremost, protecting your internal data and those of your customers is essential. Data leaks do more than cause a loss of face; they can ruin your business reputation as well. While larger national chains can absorb the financial backlash from such an incursion, your local shop down the block might not be able to do the same. Years ago, before the cloud concept had matured, many financial services experts were hesitant to join the hype train. But cloud accounting has gotten more sophisticated to the point where it is no longer bound to physical assets such as hard drives and computers. 

It Gives You the Big Picture

These days, streaming media and videos are all the rage. This transition has been a long time coming. Newer platforms such as Netflix ended up making their predecessors, such as Blockbuster, obsolete. Don’t let that happen to your business! Your organization deserves to surge as much as those who are already known around the world. Cloud accounting allows you to see the “bigger picture” of your business’s financial health in real-time. Besides, frequent updates and patches strengthen firewalls against hackers and other intruders. By linking your accounting software to your bank account, you can see the way incomes and outflows represent your transactions

Synergizes with Internet Access and Verified Credentials 

Working from home or otherwise working remotely has turned 9-5 office culture upside down. Even after Covid has been overcome, a so-called hybrid work schedule will likely remain. Have you instituted direct deposit payments for your employees? Instead of receiving paper paychecks, your team can go online and access your company’s cloud portal. As long as they are properly authorized, your workers can help spot irregularities and report problems.

Trust the Professionals at the Harding Group

Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients. 

Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning?  We have the necessary expertise and years of proven results to help. 

We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on FacebookTwitterYouTube, and LinkedIn

The post 3 Good Reasons to Switch to Cloud Accounting appeared first on The Harding Group.

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Analysis from ACCA (the Association of Chartered Certified Accountants) uncovers the drivers of change shaping sustainable business and the must-have capabilities needed from accountants as sustainable business and finance professionals of the next decade.

ACCA is building on its global research programme with the launch of the new report, Professional accountants at the heart of sustainable organisations. This latest research considers the future of the accountancy profession and identifies four new emerging career zones of opportunity for finance professionals where they can make vital contributions to businesses and other organisations:

• Zone 1: Transformation drivers

• Zone 2: Enterprise analysts

• Zone 3: Assurance providers

• Zone 4: Stakeholder reporters

The report also outlines the core competencies needed in assessing the outlook to 2030, reflecting the skills, knowledge and behaviours required for an ACCA-qualified accountant to meet the future needs and demands of the profession. Individuals will need to balance these core capabilities – such as collaboration, ethics, sustainability and expertise – to fit their role and stage of career.

Helen Brand OBE, chief executive of ACCA, said: ‘With the unprecedented challenges the world has faced since the start of the Covid-19 pandemic, our world today is not as many expected. This new report emphasises the role of business in society. Organisations large and small – in the private and public sectors – will play an essential role in forging a better world for the longer term beyond the ravages of the pandemic, and in dealing with the growing environmental emergency. The accountancy profession is an integral part of this.

‘The newly identified career zones represent a wealth of opportunity for accountancy jobs in all sectors and industries across the globe. Professional accountants are the sustainable business and finance professionals of the next decade, driving good business decision-making, creating new organisational value, protecting existing value, and communicating that value to the outside world through their reporting.

‘In tomorrow’s complex world, a human touch is still needed, where finance professionals bring their competencies, ethical and professional judgment to bear alongside their technical mastery and technological know-how to support organisations to generate sustainable societal value.’

The report uses findings gathered over the past two years, including a survey of over 2,000 responses from finance professionals, and is enriched by a wide-ranging and extensive engagement programme of roundtables with external stakeholders across the world from October 2020 to June 2021. These explored the drivers of change impacting the profession as well as examining the core capabilities needed by accountants in the future including consultation with focus groups, ACCA global forums and market specific external experts.

This engagement has informed ACCA’s new skills framework, which details the essential capabilities that all sustainable business and finance professionals will need to thrive in the future. Furthermore, it showcases how these capabilities will be needed across the various career opportunities ahead.

Report author, Jamie Lyon, said: ‘With growing organisational complexity, competing stakeholder needs, monumental societal change, workforce transition, challenged finances, technological disruption and an environmental emergency, organisations across the globe are challenged as never before. The 2020s in accountancy are a decade in which the profession is integral to building sustainable businesses that generate both financial returns and long-term value for society, while caring for the planet.

‘The Covid-19 crisis has accelerated business change at a pace unimaginable before the onset of the crisis and has presented organisations with unforeseen challenges but also unprecedented opportunities. There are major drivers of change that organisations now must navigate as they seek to be sustainable financially for the long term and create societal value -from the economy, to geopolitics to the climate crisis. It’s a world of great opportunity for the sustainable business and finance professional.’

To help people understand the opportunities, ACCA is also launching a new career navigator. This tool will help users understand the core capabilities needed at different stages of a career journey and set them apart as a sustainable business and finance professional. They’ll be able to plan their career path by exploring emerging career opportunities and job roles mapped to the blend of capabilities these require, and access relevant learning and job opportunities.

Find more information here.

The post Create, protect and sustain value – the role of accountants as trusted professionals at the heart of sustainable organisations appeared first on Accounting Insight News.